Greg's bite: Nokia's N7 smartphone, out of it?

By Greg Mills

Nokia's N7 (or X7) new touch screen smartphone running the Symbian 3 OS failed to excite AT&T enough, so the pending launch in the US was pulled at the last minute by Nokia.

Punishing AT&T for not getting too excited about another "me, too" touch screen smart phone is certain to be self-flagellation, a concept that went out with the Middle Ages. AT&T has come to the same conclusion I have long been advocating in this space: there just isn't enough interest in the market place for more than two or at the most three smartphone OS platforms. The rest are doomed to Kin out.

The smartphone market may actually boil down to just two platforms: Apple's iOS and Google's Android platform. RIM is struggling and seeing its market share drop each quarter as the two-year contracts with business users expire. The enterprise market is embracing Apple's iPad and iPhone in mass. Blackberry users who actually try the iPhone touch screen are actually finding they can use it after all.

RIM's PlayBook slate computer isn't going anywhere due to a number of inherent limitations. First, PlayBook runs on battery hog chip; second, it has no GPS chip set, won't do email or calendars and requires a BlackBerry to access the Internet from what I have been able to read. The price point is also expected to be higher than an iPad with much better technical specs.

The final nail in PlayBook's coffin is the lack of focus and market definition. Touted as a business slate computer, RIM is trying to push gaming on PlayBook. Pricing PlayBook so high only a business can afford it won't allow them to sell enough slate computers to pay off the R&D it took to launch it.

While Apple's a chart of stock prices look like an assault on the north face of Mount Everest, Nokia's stock price shows a steady march downhill. Nokia, the Finland-based cell phone company, has seen its stock fall from around US$40 a share in 2008 to its current $10 per share. RIM hasn't fallen off quite as much, but the incredible rise of Apple's market share must come from somewhere, and prior market leaders are losing out.

Failure to innovate significantly in the touch screen revolution is already taking its toll. The new Microsoft phone and platform has been a serious disappointment to a number of hardware companies that have spent no small sum building new phones to support the "too late to the party" Windows touch screen phone.

The problem in launching a new smartphone OS is in the apps that excite and amuse touch screen users. Assuming the price point of all touch screen cell phones is basically the same, the difference is in the OS platform that runs on them. The quantity and quality of apps means a lot. The significant investment in embracing a new platform is something each developer must assess for themselves. Microsoft is begging, cajoling and bribing developers to port to their new cell phone platform due to the app effect on platform penetration in the market place.

The underlying technologies and patents will also define the final outcome of the smartphone war we see before us. I see the patent battles brewing in the courts as the linch pin of the overall OS war. The battles are sequential: develop and launch a smartphone OS and the hardware that runs it, support developers who create apps specific for that platform, market the platform and then support the app stores that sell the apps.

Once that is in place (no easy or cheap task) prepare for the next round, where every significant player with a portfolio of patent files suit agains you and slugs it out in Federal Court. This is what will serve as the final straw that disconnects the losers at the end of it all.

The importance of a strong patent portfolio will become apparent in the next five years. While they have fallen off in market share, Nokia and RIM do have a lot of patents to cite against the market leaders. Even Microsoft has some phone patents they will use to try to elbow their way to the money stash Apple and Google have been hogging so far. Apple, as Steve Jobs noted when the first iPhone was launched, has patented the heck out of everything related to the iPhone and will virtuously defend Apple's technology in court.

The market place is the first hurdle venue to sort out the players. Apple has completely lapped the competition in the slate computer market and has such a lead with iPhone. I think Android has peaked as Apple begins to sell iPhone through a lot more venders. Android's rise as the alternative to iPhone won't survive competing with the real thing, sold for a similar price in every phone market. It is also questionable whether Google has the patents to survive Apple's full court press in suing all the hardware manufacturers building Android phones.

Also to be determined are infringement issues related to the Apple iOS and the Android OS. The Apple vs Google legal head on collision is sure to come, sooner than later. When Apple sued Microsoft years ago for stealing the look and feel of the Mac OS, Microsoft dragged them out in court and actual won by attrition. Jobs learned from that experience and made sure that won't happen again. My money is on Apple beating Google first in the market place and then sealing the deal in court.

Thats's Greg's Bite for today.

(Greg Mills, is a Faux Artist in Kansas City. Formerly a new product R&D man for the paint sundry market, he holds 11 US patents. He's working on a solar energy startup, www.CottageIndustrySolar.com using a patent pending process of turning waste dual pane glass into thermal solar panels used to heat water. Greg writes for intellectual web sites and Mac related issues. See Greg's art web site at www.gregmills.info ; His email is gregmills@mac.com )

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